Bitcoin Mining Fees Soar

South Korea’s lawmakers and Ministry of Finance have reportedly shot down a crypto-trading ban proposed by the South Korean Ministry of Justice (since more than 2 million South Koreans own bitcoin, such a ban would inevitably lead to many retail traders booking heavy losses).

But China’s attempt to suppress the local crypto economy is continuing unabated as the PBOC leans on local authorities to deny resources to bitcoin miners and exchanges to encourage “an orderly exit” from the business.

Today, Bloomberg reported that ViaBTC Technology Ltd., which runs the fourth-biggest bitcoin mining collective, is jacking up maintenance fees for some of its clients Friday to 50% from 6%, according to a statement posted on its website.

The disruption in mining power has caused already soaring transaction fees to climb to all-time highs as transactions compete for space on the network. 

Indeed, many miners have already fled to Canada, the US - even as far away as Iceland. But those that remain are being squeezed by market forces as local authorities seek to deny them access to the cheap, subsidized electricity that allowed Chinese miners to flourish in the first place.

As Bloomberg explains, Chinese officials have reportedly asked local governments to guide miners toward an “orderly” exit from the business. ViaBTC has moved most of its operations to Iceland and America as a result. Once a hotbed for mining, China’s crackdown will fundamentally change the landscape of the bitcoin economy.

CREDIT: Lisa Moore